All Forum Posts by: Jonathan D.

Since our business in flipping properties and not holding onto them for investments, I am guessing that we will have to determine if it is worth opening up bank accounts for each LLC (which will only be for about 4-6 months each) and then closing them to avoid the co-mingling of funds?

@Michael Seeker. That is what i was thinking.... As long as I track my expenses accordingly and attribute them based on the number of LLC at the time of expense, it should be fine. I am doing the same thing with the debt.... i.e. I have a $500,000 loan @ 7.5% and I use $100,000 on Invesement Property A for 1 year, I can attribute the interest of $100,000 for 7.5% for 1 year to that property as an expense and deduct it from the profit when I pay interest on that loan.

@Bob Okenwa . I currently am using Quickbooks, and I have set up an separate entity for each LLC. That is an interesting point on co-mingled funds. I would prefer to not open up a bank account for each LLC. What has everyone else done to keep this separate?

Michael Seeker Investor from Louisville and Memphis, TN

Hi All,

My partner and I have started our businesses flipping homes. We have our main LLC (call it LLC-1) and then each property we purchase and flip gets their own LLC (for risk reasons). We have a general loan for all of our business activities which has been deposited into LLC-1 bank account. When we do work on each flip, we pull the funding from LLC-1 to pay for expenses and track everything separate. So this poses a couple questions:

1. Do we need separate bank account for each LLC we register or can it be centrally managed by a single one as long as we track expenses

2. How do we allocate the interest from the loan as a carrying cost to each of the flip properties? 

3. How do we account for overhead and general operating expenses? i.e. we have a business dinner, we pay for cell phones, etc. Since our main LLC (LLC-1) isn't really doing anything (no properties will be associated with it), how do i distribute those expenses against the flip properties?

Thanks! 

Jonathan